Exchange of Naval Nuclear Propulsion Information Agreement

Lord Bilimoria Excerpts

Monday 17th January 2022 Grand Committee

[Lord Bilimoria (CB)]

My Lords, as the UK redefines its role in the world, it must remain globally competitive, dynamic and outward facing. The key foreign policy strategy for that is the integrated review which we launched on 16 March last year.

As president of the CBI, I know that business welcomed the importance placed on relations with key growth markets to boost business confidence, along with a balanced approach to China as outlined in the review. AUKUS is an example of this strategy in action; it is an acknowledgment that the key battlegrounds will not be in the industries of old but in industries of the future, including nuclear, and having this agreement shows that the UK is going to collaborate to ensure that we have the competitive advantage to offer the world.

Unless the West steps up and collaborates, it leaves China and others to fill the void. China accelerated its CPTPP accession plans and made formal announcements to that effect just days after the AUKUS pact announcement. That was not unrelated.

China is very competitive in some of the industries of the future, leading the world on AI and autonomous vehicles, but we in the UK also have significant strengths and services—also in AI—with innovation spinning out of our best of the best universities in the world, including on things like graphene. There is an important dynamic on standards and rules of the future across many of these technologies and industries, and the UK should be at the forefront of leading and convening those dialogues. We should be the key interlocutor bridging different views. We had the G7 summit last year, which we hosted and led, and we have the G20 in Indonesia next year. These are key moments, and these collaborations can really create a global leadership role for the UK promoting multilateralism and partnership, ideally rooted in human rights and the rule of law. These are the types of values we hold dear in our economy.

The integrated review of global Britain in a competitive age—looking at security, defence, development and foreign policy—was the first time that such a review was created and was a comprehensive articulation of our security and international policy, taking into account sovereignty, security, prosperity, democracy and a commitment to human rights, the rule of law, freedom of speech and faith and equality. It is a far cry from the 2015 SDSR, and let us not even get started on the 2010 SDSR—I see red when I remember it—which decimated our Armed Forces and was the worst in our history. Thank God we have moved on from that.

This integrated review sets out a vision for global Britain: our openness as a source of prosperity; a more robust position on security and resilience; a renewed commitment to the UK as a force for good in the world; increased determination to seek multilateral solutions to challenges such as climate change. AUKUS is a multilateral solution as well, which stresses the importance of deepening our relationship with our allies and partners in the world. The integrated review has four overarching objectives. The first is sustaining strategic advantage through science and technology—AUKUS ticks that box. The second is shaping the open international order of the future—AUKUS ticks that box. The third is strengthening security and defence at home and overseas with allies and partners to help maximise the benefits of openness and protect our people from growing threats—AUKUS ticks that box. The fourth is building resilience at home and overseas—AUKUS ticks that box. The integrated review and AUKUS therefore go hand in hand.

I thank the noble Baroness, Lady Hayter, and her committee for all their work. The deal that the Australian, United States and UK Governments signed in September is a joint statement creating a trilateral agreement. This is of course on top of the existing Five Eyes, involving Australia, Canada, New Zealand, the United States and the UK. People forget that the origins of the Five Eyes go back—if I am not mistaken—to 1941. It is a solid relationship that we have together. This time, with AUKUS, it is about the acquisition of nuclear-powered submarines and the resulting co-operation. We also have, as the noble Lord, Lord Lansley, mentioned, the Quad agreement between Japan, Australia, the UK and India, which is also a very strong agreement and has a lot of potential. Also, just last week, we signed the start of the negotiations on the UK-India free trade agreement, which will be one of our most important free trade agreements going forward. The negotiations will, we hope, carry on throughout this year.

There are some points to note. AUKUS is the Exchange of Naval Nuclear Propulsion Information Agreement, and the Royal Australian Navy will be able to safeguard the peace and security in the region as a result. This will be in a scoping phase for 18 months, but have the Government taken into account the Australian elections coming up some time between March and May? Will this deal survive a change of government? We do not know if there will be a change, but have our Government considered the implications of this?

Before concluding, I just want to touch on the House of Commons debate on the Command Paper, which was also relevant to this. Of course, the Army will go down to 72,500 people by 2025. I find this really concerning. Our Armed Forces, including our Army—the boots on the ground—need to have a critical mass. We talk about the Army not filling Wembley Stadium; 72,500 is way below filling it. When my father, General Bilimoria, commanded the Central Command in India, it was made up of 350,000 troops, so this is a matter of concern.

This new partnership has huge implications and has been well received. The UK National Security Adviser, Sir Stephen Lovegrove, said that the submarine element of the partnership is

“perhaps the most significant capability collaboration anywhere in the world in the past six decades.”

There is also the potential for lucrative defence and security opportunities for UK industry, not just in submarine-building but in other areas that the noble Baroness, Lady McIntosh, spoke about, such as cybersecurity, artificial intelligence and quantum technology. One of the CBI’s largest members is BAE Systems, which is chaired by one of my predecessors as president of the CBI, Sir Roger Carr, and has as a board member Dame Carolyn Fairbairn, the former director-general of the CBI.

So this partnership could be very good news for companies like BAE Systems. However—this point is important—the tilt in the Indo-Pacific is very important. We must not forget what is on our doorsteps with Europe. What is happening in Ukraine, in front of our eyes, is crucial. This is not an either/or; it is an “and”—that is, both Europe on our doorstep and the Indo-Pacific. Of course, the Australian Prime Minister has said that one of the key drivers of the agreement is the growing security challenge in the Indo-Pacific; we will address it as well.

There is another point that the Government must take into account, and this does not involve the transfer of nuclear weapons to Australia. AUKUS does not contravene the nuclear non-proliferation agreement, but there is a concern because New Zealand has said that it will not allow these nuclear-powered submarines into its territorial waters. What will the effect on Five Eyes be? None, I hope, but it is something to be considered.

On 16 December—or 17 December, depending on whether you are in the UK or Australia—we signed the UK-Australia Free Trade Agreement. I was privileged to play a part in helping with the agreement throughout, alongside the Australian Minister for Trade, Dan Tehan, and our Secretary of State for International Trade, Anne-Marie Trevelyan. It is the most comprehensive and modern free trade agreement in the world. The main part of it was negotiated in 365 days. It is duty-free and tariff-free. It covers goods, services, mobility, youth mobility, digital, SMEs, agriculture, innovation, climate change and the environment. The good news is, having signed it, the next step is accession to the CPTPP, and Dan Tehan is the vice-chairman of the accession committee. Hopefully, this year, we will join the CPTPP, which is made up of 11 countries and represents more than £110 billion of trade for us. That will be very good news.

We have the integrated review, AUKUS, the UK- Australia Free Trade Agreement and Five Eyes; and soon, we will have the CPTPP. Trade and security, hand in hand, will be intertwined, not as a thread between the UK and Australia but as a solid rope all the way through.

--- Later in debate ---

[Baroness Goldie (Con)]

It would have been difficult for the noble Lord to corroborate it; I was doing it in the privacy of my bedroom.

AUKUS is a concrete demonstration of the commitment made by the UK in the integrated review to deepen co-operation, partnerships and engagement in the Indo-Pacific. We are committed to deepening relationships with countries in that region. By 2030, the region will represent more than 40% of global GDP, so the announcement is a clear demonstration of both our interest in and commitment to that area.

The noble Baroness, Lady Smith, said, “Well, this is all fine and well, and we understand what it means for the Indo-Pacific area, but what about everything else in defence?” I say to her that if we take in conjunction the integrated review and the recent defence Command Paper, not to mention the recent Future Soldier paper which was the subject of a Statement in the Chamber, we see in all of those, detailed information on how we meet threat, wherever that is coming from, whether it is directed at us within the UK or at our partners and allies. We have a clear plan as to how we think we should meet that, and it is a plan that will endure in the forthcoming decades.

This is an important agreement for Australia, the United States and the United Kingdom, as it is for the wider issues of stability in the region. The noble Lord, Lord West, commented both shrewdly and authoritatively on those issues. The agreement certainly reflects the importance we attach to the area in terms of the integrated review—that was also recognised by my noble friend Lord Lansley.

[Lord Bilimoria (CB)]

I earlier listed the countries that make up the Quad and said India, Australia, Japan and—by mistake—the UK. Of course, it is the US; the noble Lord, Lord Lansley pointed that out to me.

I cannot resist a serendipitous opportunity. The noble Baroness, Lady McIntosh, asked me why the UK is not a member of the Quad. With the integrated review and our tilt to the Indo-Pacific, perhaps there is an opportunity for the UK to join the Quad in the future.